State Ceases Enforcement of Marijuana Business Residency Requirement

The Office of Marijuana Policy issued a letter on May 11, stating that, “Following the advice of the Office of the Attorney General, DAFS and OMP will cease enforcement of the residency requirement included in the Marijuana Legalization Act and the Adult Use Program Rule.” This decision is issued in response to a lawsuit filed against DAFS, which challenged the constitutionality of the requirement under the “dormant Commerce Clause” of the U.S. Constitution.

Many Maine municipalities have adopted marijuana licensing and zoning ordinances which require business owners or applicants to be Maine residents. These were largely considered to be supportive of the existing residency requirements under state law. With OMP and DAFS having concluded that their requirements are void, similar ordinance provisions would also likely be considered unenforceable. Municipalities should work with legal counsel and consider repealing those portions of their marijuana ordinances that require residency. Such requirements will clearly be subject to challenge as local businesses learn of the state’s decision.

Maine Legislature Overrides Veto of Retail Marijuana Law

The Maine Legislature today voted to override Governor LePage’s veto of LD 1719, “An Act to Implement a Regulatory Structure for Adult Use Marijuana.” This is good news for municipalities eager for some certainty on what they’ll be dealing with when retail (“adult use”) marijuana establishments come to town. 

The Act makes significant changes to the existing Marijuana Legalization Act. It details state licensing procedures and criteria, as well as operational standards that must be followed by marijuana cultivation facilities, products manufacturing facilities, testing facilities, and retail stores. Anyone wishing to operate one of these facilities must first obtain a conditional state license and then receive approval from the local municipality before returning to the state for final approval. Municipal approval cannot be granted unless the municipality has adopted a town meeting article or ordinance allowing some or all types of marijuana establishments within the municipality. This essentially creates an opt-in arrangement for municipalities—meaning that no retail marijuana establishments may be located in a town unless that town has affirmatively voted to allow them. 

The Act gives municipalities broad latitude in regulating marijuana establishments. They may forbid or limit the number of any particular type of marijuana establishment. They may instead choose to adopt land use and licensing regulations and implement application fees. Marijuana establishments may not be located within 1,000 feet of a preexisting public or private school, but that distance may be reduced by ordinance to as little as 500 feet. 

As a practical matter, licenses will not be available until licensing regulations are in place. This is anticipated not to occur until at least the end of summer 2018.

Maine Legislature Allows Recreational Marijuana Law to Go Fully into Effect

The Maine State Legislature today voted against legislation extending the moratorium that had held the citizens’ enacted recreational marijuana law from going into full effect since its enactment in November 2016 (it has been legal since early 2017 to possess up to 2.5 ounces of marijuana, grow your own plants, and to give gifts of marijuana to other people). The immediate effect of the law should be to spur the required state licensing rulemaking process to be completed. The law provides for licensing systems for retail and social clubs, and mandates that rulemaking procedures occur before those licenses are issued. Licenses will be required for retail sales, social clubs, production, and testing facilities. The State rulemaking proceeding will take a considerable amount of time to develop the rules. Under the new law, a municipal license is also required before any retail establishment can open. The State must provide all license applications on State forms.

The medical marijuana law is unaffected by the recreational marijuana law.

Undoubtedly many questions and issues will be arising about this and we will be updating this blog as things happen.

Maine Legislature Votes on Marijuana Bill Veto

Updating our previous post on the fate of LD 1650, Governor LePage last week vetoed the bill and set the stage for action at the State House on Monday, where the Legislature was deciding whether to override the Governor’s veto. A two-thirds vote in both the House and Senate was required to overcome a veto.

We now know the result: the veto has been sustained, with the House voting 74-62 to uphold the Governor’s action.

A vote to override the Governor’s veto would have meant that the bill, which provided a framework for implementing the legalization of recreational marijuana approved by voters last November, would have become law and provided some flexibility for municipalities to regulate recreational marijuana. Today’s vote at the Legislature, however, means that the legalization of recreational marijuana will continue to be in legal limbo for the foreseeable future.

Marijuana Bill Awaits Veto Decision

LD 1650, An Act to Amend the Marijuana Legalization Act, was passed in both the House and the Senate on October 23, 2017. Governor LePage has until November 2, 2017, to sign the bill, veto the bill or allow it to become law without his signature. The 77-page bill comprehensively rewrites the legalization bill enacted by Citizens’ Referendum now one full year ago. Legalization of marijuana has continued to be in a legal limbo. It is legal to grow and possess certain amounts of marijuana, but it is not legal to buy or sell it, even privately.

As a municipality there are reasons to be in favor of this amended law. It now contains an opt-in provision for municipalities rather than an opt-out provision. Because of this, some of the organizations backing legalization have actually opposed the bill because they argue that it is more difficult for a municipality vote to opt-in to a law than it is to opt-out. The bill also provides economic incentives to those municipalities who participate in the program and do not opt-out. The law provides for a number of different types of licensing, including retail sales, grow only and testing facilities. A licensee may hold the first two licenses, but the testing facility must be independent. If the governor does not sign the law, there will be a number of challenging legal issues arising.

The bill also sets more appropriate tax rates, limits properties to 18 plants growing, closes “gift” and “delivery” scams and allows employers to hire and fire based on adult use of legal marijuana.